The markets wilted under the Japan crisis and the fresh political furore towards the end of the week. Further, FIIs turning net sellers in the cash and derivatives segment also dampened the investor sentiment.
Despite a positive start to the week, the Sensex after touching a high of 18,464 traded sideways, with a negative bias. The BSE benchmark index finally ended with a loss of 295 points at 17,879.
Among the Sensex 30 stocks, Reliance Communications zoomed nearly 9 per cent to Rs 105, and Reliance Infrastructure surged nearly 4 per cent. Tata Power and Tata Steel were the other major gainers. On the other hand, Maruti Suzuki dropped nearly 8 per cent to Rs 1,158 and HDFC shed 6 per cent. Hindalco, ONGC, Hero Honda, Infosys, Mahindra & Mahindra, Tata Motors and Hindustan Unilever were the other major gainers.
As per the Fibonacci monthly levels, the Sensex has given a buy signal and will remain positive as long as the index remains above 17,800 on a closing basis, the trend will remain up. A break of the same could trigger significant weakness wherein the index can drop around 500-800 more points. On the upside, the Sensex needs to close above 18,460 for a positive breakout.
As of now, one needs to exercise extreme caution as key momentum indicators have all turned negative on the daily, weekly and monthly charts. The MACD (Moving Average Convergence-Divergence), RSI (Relative Strength Index) and Slow Stochastic are all favouring a bearish phase ahead.
The NSE Nifty moved in a range of 171 points, the index touched a high of 5,537 and a low of 5,366, before settling with a loss of 72 points at 5,374.
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The bearish formation indicates the Nifty can dip to 5,300 in the near future, and fresh trouble can be expected below it. However, on the positive front, the index needs to close above 5,535 for a change in trend.
Unlike the Sensex and the Nifty, the Bank Nifty holds some promise for now. The index has considerable support around 10,600, and the momentum indicators are also in neutral zone. The index needs to cross the 200-DMA (Daily Moving Average), which is at 11,110, for fresh upside momentum.